Moderate economic growth to continue

Statistics Norway (SSB) analysts predict that the moderate growth in economic activity in Norway and abroad experienced last year will continue for another few years. They predict that loss of powerful growth impulses from petroleum investments will be replaced by a moderate increase in growth in other demand. Unemployment will continue to rise slightly, to almost 4 per cent in 2015.

SSB's analysts say the Norwegian economy is first expected to enter a clear economic upturn in 2016, helped considerably by growing international demand. Unemployment may consequently fall slightly in 2017.

SSB points out that economic growth of Norway's trading partners remains very low, despite picking up somewhat last year. Among Norway's main trading partners, this was most evident in the USA, UK and Sweden. The Danish economy has barely grown in three years. In the euro area, the GDP is also now growing, albeit weakly, after a long period of decline. Unemployment levels are very high, but there are signs of improvement in several countries.

The SSB-report states that the continuing restrictive fiscal policy in much of the OECD area means that growth will only increase slowly, and they do not envisage an upturn in the economy among Norway's trading partners as a whole until 2015, and even later in the euro area. This will contribute to keeping interest rates low going forward, even though the interest rates should increase somewhat in 2016 and 2017.

Petroleum investments increased by as much as 18 per cent last year, thereby making up a third of the growth in mainland Norway’s GDP. SSB analysts expect that the oil price will gradually fall to around 95 US dollars at the end of 2015, and then remain unchanged in real terms. In the projections we assume that the investment peak was reached last year. Measured on an annual basis as a share of mainland Norway’s GDP, they expect petroleum investments in 2014 to amount to just over 9 per cent of mainland Norway’s GDP, which will be the highest share ever.

- We assume that investments will remain fairly stable over the next few years, with a slight decline in 2017, the SSB analysts say.